Splunk To Buy Cloud-Monitoring Software Maker SignalFx For $1.05 Billion

Splunk Inc. reached a $1.05 billion deal to buy cloud-monitoring startup SignalFx Inc., a deal that would strengthen the cybersecurity and data-analytics firm’s offerings in the fast-growing cloud-computing sector. The Wall Street Journal reports: Founded in 2004, Splunk — a play on the word “spelunking” — collects and analyzes data to help companies identify patterns, like customers’ beverage preferences, and detect anomalies, say fraud or a cyberattack. Splunk officials told analysts that Splunk has some customer overlap with San Mateo, Calif.-based SignalFx and that the target company’s software represents a “top tier asset to the things that matter” to clients. Closely held SignalFx was valued at nearly $500 million after a $75 million funding round that closed in May, according to a Dow Jones VentureSource estimate. The cash-and-stock deal is expected to close in the second half of Splunk’s fiscal year, which ends Jan. 31. San Francisco-based Splunk, which went public in 2012 and carries a nearly $1.5 billion deficit, said it would be able to absorb the added operating costs from the deal. Splunk has been increasing its cloud business, which accounted for 25% of revenues in the July quarter and is expected to represent half of operations over the next few years, company officials said.